Economy

ISM: Service Sector Growth Picked Up in June

Service sector employee, nurse at a hospital. (Photo: REUTERS)

U.S. service-sector activity increased more than expected in June. The Institute for Supply Management (ISM) Non-Manufacturing Report on Business purchasing managers index rose to 56.5 in June from 52.9 in May, the highest reading since November.

The median economic forecast called for the index to increase to 53.6. Key components of the index also gained ground. New orders registered at 59.9, up from 54.2 in May. Employment grew to 52.7 from May’s 49.7. The ISM doesn’t disclose the date its survey closes, so it isn’t clear if the latest report fully captures uncertainty in global markets generated by the United Kingdom’s vote to leave the European Union.

A separate ISM survey released Friday showed that almost one-third of service-industry businesses thought their firm would be negatively or slightly negatively affected by the Brexit.

SERVICE SECTOR INDUSTRY PERFORMANCE

The 15 non-manufacturing industries reporting growth in June — listed in order — are: Mining; Arts, Entertainment & Recreation; Management of Companies & Support Services; Retail Trade; Health Care & Social Assistance; Utilities; Real Estate, Rental & Leasing; Accommodation & Food Services; Transportation & Warehousing; Wholesale Trade; Information; Public Administration; Agriculture, Forestry, Fishing & Hunting; Construction; and Finance & Insurance. The three industries reporting contraction in June are: Educational Services; Professional, Scientific & Technical Services; and Other Services.

ISM^® NON-MANUFACTURING SURVEY RESULTS AT A GLANCE COMPARISON OF ISM^® NON-MANUFACTURING AND ISM^® MANUFACTURING SURVEYS* JUNE 2016
	Non-Manufacturing						Manufacturing
Index	Series Index Jun	Series Index May	Percent Point Change	Direction	Rate of Change	Trend** (Months)	Series Index Jun	Series Index May	Percent Point Change
NMI^®/PMI^®	56.5	52.9	+3.6	Growing	Faster	77	53.2	51.3	+1.9
Business Activity/Production	59.5	55.1	+4.4	Growing	Faster	83	54.7	52.6	+2.1
New Orders	59.9	54.2	+5.7	Growing	Faster	83	57.0	55.7	+1.3
Employment	52.7	49.7	+3.0	Growing	From Contracting	1	50.4	49.2	+1.2
Supplier Deliveries	54.0	52.5	+1.5	Slowing	Faster	6	55.4	54.1	+1.3
Inventories	55.5	54.0	+1.5	Growing	Faster	15	48.5	45.0	+3.5
Prices	55.5	55.6	-0.1	Increasing	Slower	3	60.5	63.5	-3.0
Backlog of Orders	47.5	50.0	-2.5	Contracting	From Growing	1	52.5	47.0	+5.5
New Export Orders	53.0	49.0	+4.0	Growing	From Contracting	1	53.5	52.5	+1.0
Imports	54.0	53.5	+0.5	Growing	Faster	5	52.0	50.0	+2.0
Inventory Sentiment	62.5	60.0	+2.5	Too High	Faster	229	N/A	N/A	N/A
Customers’ Inventories	N/A	N/A	N/A	N/A	N/A	N/A	51.0	50.0	+1.0
Overall Economy				Growing	Faster	83
Non-Manufacturing Sector				Growing	Faster	77

* Non-Manufacturing ISM^® Report On Business^® data is seasonally adjusted for Business Activity, New Orders, Prices and Employment Indexes. Manufacturing ISM^® Report On Business^® data is seasonally adjusted for New Orders, Production, Employment and Supplier Deliveries.

** Number of months moving in current direction.

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PPD Business Staff

PPD Business, the economy-reporting arm of People's Pundit Daily, is "making sense of current events." We are a no-holds barred, news reporting pundit of, by, and for the people.